Elmhurst Council OKs North York TIF district

Graydon Megan, Special to the Tribune

The Elmhurst City Council has given the green light to establishing the city's fourth tax-increment-financing district on North York Street.

The council approved the district in an 11-1 vote Sept. 4. The district will extend along a narrow corridor on both sides of York Street, from downtown Elmhurst on the south to Grand Avenue on the north.

In a controversial move, the council also voted 10-2 to sever the long-stalled Hahn Street redevelopment area, which is just south of North Avenue, from the downtown TIF district and add it to the new TIF district.

Aldermen Michael Bram and Diane Gutenkauf voted against including the Hahn Street property in the new district.

"I'm against pulling Hahn Street into the new TIF," Bram said. "The new TIF is a good one. I support it to revitalize properties north of North Avenue."

City Manager James Grabowski said moving the Hahn Street property into the new TIF would extend the time available to redevelop that property to 23 years, which is the life span of the new TIF. The downtown TIF will expire in nine years unless it is extended.

Tax-increment financing is a tool that can be used to spur development of blighted or underutilized property. Under TIF rules, municipalities "freeze" equalized assessed valuation of properties in the district and use growth in property taxes — the increment — to fund land acquisition, infrastructure improvements and other qualifying development costs.

The new tax district includes 175 parcels over 126 acres, most of them about one parcel deep. Of the 112 buildings in the district, 63 percent are more than 35 years old.

Elmhurst already has three other TIFs — downtown, at Illinois Highway 83 and St. Charles Road, and in an area roughly bounded by Lake Street, Interstate 290 and Church Road. City officials say the districts have spurred development and growth.

But not everyone is a fan.

"I could never understand why this town got involved in real estate," resident Claude Pagacz told council members, criticizing the city's inability to find a developer for the Hahn Street property.

"We're going to be sitting on York Street like we've been sitting on Hahn," he said later. "When you make a mistake, I pay for it."

Other taxing bodies, including school, park and library districts, also sometimes object to TIFs, since they in effect lose tax revenue during the life of the TIF. Assistant City Manager Mike Kopp said the city was negotiating with Elmhurst Community Unit School District 205 and other taxing bodies to share some gains in property tax revenue during the life of the TIFs, rather than making them wait until the TIFs end to see gains in property tax revenue.

Charles Biondo, senior vice president of Kane, McKenna and Associates Inc., which is consulting on the new TIF, said that when the North York Street TIF is fully built it could have a value of as much as $150 million.

"We're planting seeds for the future," Mayor Pete DiCianni said of the new TIF. "It's a great thing."